Geline Salac

Article (news)

Raine Musñgi

ABS-CBN News

MANILA, Philippines — The battle for digital banking customers is entering a new phase, and it is no longer centered on who charges the lowest transfer fee.Instead, banks are beginning to compete on who can build deeper customer relationships, offer more financial products and keep clients within their ecosystems, as free digital fund transfers become the new competitive baseline.The shift comes as the Bangko Sentral ng Pilipinas (BSP) accelerates its push for a low-cost, interoperable digital payments ecosystem. BSP Governor Eli Remolona Jr. has said lower transaction costs can speed up digital payment adoption and increase the value of the country&#x27;s payment system, while Deputy Governor Mamerto Tangonan said the central bank continues to strengthen digital payment infrastructure through InstaPay, PESONet, QR Ph, Bills Pay PH and other interoperable payment platforms.For Rizal Commercial Banking Corporation (RCBC) Executive Vice President and Chief Innovation and Inclusion Officer Lito Villanueva, the implications go far beyond waiving a P10 or P15 transfer fee.&quot;I think it&#x27;s really more about upselling, cross-selling, and having to really optimize what we call the customer lifecycle value,&quot; Villanueva said in an interview on ANC&#x27;s Business Outlook.&quot;Payments is practically a utility... Banking is all about relationships.&quot;<div><iframe width="640" height="360" src="https://www.youtube.com/embed/ivEiMvrO_Ho?&amp;t=1s&amp;wmode=opaque&amp;rel=0" frameBorder="0" allowfullscreen="" class="fr-draggable"></iframe> </div>His remarks point to what could become the Philippine banking industry&#x27;s next defining challenge. As payment services become increasingly commoditized, lenders are looking to replace lost fee income by strengthening long-term customer relationships and expanding the use of higher-value financial products such as loans, investments, wealth management and insurance.<div>Betting on volume, not fees</div>Villanueva said the industry&#x27;s shift did not happen overnight.Behind the scenes were years of discussions between regulators and financial institutions, investments in payment infrastructure and confidence that greater transaction volume can eventually outweigh declining fee revenues.&quot;At the end of the day, it&#x27;s really more about the volume, the transaction velocity,&quot; he said.RCBC launched free InstaPay transfers on July 4 and began offering free PESONet transfers on July 15 after making backend upgrades to prepare for a potential surge in digital transactions.&quot;While you&#x27;re giving that for free, you&#x27;re also making sure that every transaction is safe and secure. The bottom line here is still consumer protection,&quot; he said.The BSP has welcomed the growing number of banks waiving or reducing digital transfer fees, saying lower transaction costs can make electronic payments more affordable and accessible while encouraging wider adoption across consumers and businesses.The central bank has been building the country&#x27;s digital payments ecosystem since launching the National Retail Payment System in 2017.According to BSP data, 53.4 percent of retail payment transactions were already digital in 2024, surpassing the central bank&#x27;s earlier target of 50 percent. The BSP is now working toward its next milestone of 60 percent digital retail payments by 2028, alongside broader financial inclusion for Filipino adults.Villanueva believes lower transfer costs can help accelerate that momentum, particularly among consumers and micro, small and medium enterprises that make frequent digital transactions.<div>Banks versus e-wallets? Not quite</div>Despite banks increasingly offering free transfers, Villanueva does not expect consumers to abandon electronic wallets such as GCash and Maya.&quot;I don&#x27;t think that it would impact,&quot; he said when asked whether banks could lure users away from the country&#x27;s largest e-wallet platforms.Instead, he pointed to the different economics underpinning banks and non-bank electronic money issuers.&quot;We have different business models,&quot; he said.While banks can potentially offset lower transaction-fee income through lending, deposits and cross-selling other financial products, many fintech firms rely more heavily on fee-based revenues.&quot;We&#x27;re supporting this initiative to make adoption of digital payments more inclusive, but we also have to take into account the sustainability of the business. We&#x27;re not here for charity.&quot;GCash and Maya have each reduced InstaPay transfer fees from P15 to P10, but neither has adopted a zero-fee model.<div>Zero fees remain a business decision</div>Villanueva also emphasized that the BSP has not ordered banks or electronic money issuers to eliminate transfer fees.&quot;As I&#x27;ve said, the mandate of Circular 1238 is not a zero-based mandate, but a cost-based mandate.&quot;Circular No. 1238 promotes transparent and cost-based pricing for electronic fund transfers while also expanding digital payment acceptance by making it easier for micro and informal merchants to join the formal payments ecosystem.That distinction allows banks, e-wallet providers and other payment players to adopt pricing strategies suited to their respective business models, while ensuring fees remain fair and justifiable.<div>Regional spotlight turns to Manila</div>The rapid transformation of Philippine digital finance comes as policymakers, regulators, banks and fintech firms prepare to gather in Manila for the ASEAN Fintech Summit on July 28 and 29.The conference comes at a pivotal moment, with the Philippines chairing ASEAN in 2026 and the region accelerating efforts toward greater cross-border payments, interoperability, digital identity and emerging technologies such as stablecoins.Villanueva, who also chairs FinTech Alliance.PH, said the summit is expected to draw more than 100 speakers from nearly 20 countries and over 3,000 participants.&quot;We will be asking the hardest questions. This will not be your usual forum,&quot; he said.As banks rethink how they generate revenue, fintech firms defend their business models and regulators push for broader digital adoption, many of the debates shaping the future of Southeast Asia&#x27;s financial system are expected to converge in Manila later this month.

The battle for digital banking customers is entering a new phase, and it is no longer centered on who charges the lowest transfer fee.

The battle for digital banking customers is entering a new phase, and it is no longer centered on who charges the lowest transfer fee.

PH banks enter 'freemium era' as free transfers force industry to rethink how they make money

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PH banks enter 'freemium era' as free transfers force industry to rethink how they make money

Raine Musñgi,

ABS-CBN News

Published July 16, 2026 08:05 AM PHT

Read More:

banking

transfer fees

BSP

RCBC

fintech

e-wallets

ANC

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